What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-12-10 compared with 2020-12-11 · 484 added, 412 removed, 970 unchanged (48% of the section changed)

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 31, 2021 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for Leases as of November 1, 2019 due to the adoption of Financial Accounting Standards Board Accounting Standards Codification Topic 842, Leases .

Basis for Opinions

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Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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We believe that our audits provide a reasonable basis for our opinions.

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Definition and Limitations of Internal Control Over Financial Reporting

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Unrecognized tax benefits

As discussed in Notes 1 and 6 to the consolidated financial statements, the Company has recorded a liability for unrecognized tax b enefits, excluding associated interest and penalties, of $58.5 million as of October 31, 2020.

A reserve for unrecognized tax benefits is recorded when there is a greater than 50% likelihood that a position taken on the Company’s tax returns would not be sustained upon examination by the relevant taxing authority, based solely on the technical merits of the tax position.

We identified the assessment of unrecognized tax benefits as a critical audit matter.

Evaluating the Company’s interpretation of tax law and its identification and estimate of uncertain tax positions, including transfer pricing related to its international operations, required complex auditor judgment.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s

Fair value of intangible assets used to recognize a deferred tax asset

As discussed in Note 6 to the consolidated financial statements, the Company completed an intra-group transfer of certain intellectual property and related assets of the CooperVision business to a United Kingdom subsidiary during the year ended October 31, 2021.

As a result of the transfer, the Company recognized a deferred tax asset of $1,987.9 million, with a corresponding income tax benefit, based on the fair value of the transferred intangible assets.

We identified the evaluation of the fair value of the transferred intangible assets used to recognize the deferred tax asset as a critical audit matter.

A high degree of challenging auditor judgment was required to evaluate certain assumptions made by the Company in estimating the fair value of the intangible assets.

These assumptions included the near-term revenue growth rates, discount rate, and operating margin assumptions.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

unrecognized tax benefit process, including controls related to the interpretation of tax law, identification of uncertain tax positions, and measurement of related liabilities.

We involved tax and valuation professionals with specialized skills and knowledge, who assisted in:

evaluating the Company’s tax planning strategies and its interpretation and application of tax laws,

assessing transfer pricing studies for transactions between subsidiaries of the Company for compliance with applicable laws and regulations and evaluating the transfer prices based on observations for comparable companies that perform similar functions, and

inspecting correspondence and settlements from taxing authorities, and analyzing the expiration of statutes of limitations.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to estimate the fair value of the intangible assets.

This included controls related to the development of the near-term revenue growth rates, discount rate, and operating margin assumptions.

We evaluated the reasonableness of the near-term revenue growth rates by comparing them to historical results and third-party analyst expectations for the industry.

We involved valuation professionals with specialized skills and knowledge, who assisted in (1) evaluating the discount rate by comparing it to a discount rate range that was independently developed using publicly available market data for comparable companies in the industry, and (2) evaluating the operating margin assumptions by comparing them to margins earned by comparable companies in the industry.

We have served as the Company’s auditor since 1982.

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(In millions, except for earnings per share)

2021 2020 2019

Net sales $ 2,922.5 $ 2,430.9 $ 2,653.4

Cost of sales 966.7 896.1 896.6

Gross profit 1,955.8 1,534.8 1,756.8

Selling, general and administrative expense 1,211.2 992.5 996.2

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Impairment of intangibles — — 0.4

Gain on sale of an intangible (Note 4)

Gain on sale of an intangible — — ( 19.0 )

Operating income 505.8 311.8 546.7

Interest expense 23.1 36.8 68.0

Other expense (income), net

Other (income) expense, net ( 8.8 ) 8.5 1.3

Income before income taxes 491.5 266.5 477.4

Provision for income taxes (Note 6) ( 2,453.2 ) 28.1 10.7

Net income 2,944.7 238.4 466.7

Net income attributable to Cooper stockholders $ 2,944.7 $ 238.4 $ 466.7

Earnings per share (Note 7)

Basic $ 59.80 $ 4.85 $ 9.44

Diluted $ 59.16 $ 4.81 $ 9.33

Number of shares used to compute earnings per share:

Basic 49.2 49.1 49.4

Diluted 49.8 49.6 50.0

The accompanying notes are an integral part of these Consolidated Financial Statements.

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(In millions)

Other comprehensive loss:

Cash flow hedges, net of tax (benefit) of $(4.1) in fiscal 2020

Change in minimum pension liability, net of tax (benefit) provision of $(4.0), $(8.0) and $3.1, respectively

2021 2020 2019

Net income $ 2,944.7 $ 238.4 $ 466.7

Other comprehensive income (loss):

Cash flow hedges, net of tax provision of $ 8.2 and $( 4.1 ) in fiscal 2021 and fiscal 2020, respectively

26.1 ( 13.0 ) —

Change in minimum pension liability, net of tax provision of $ 7.2 , $( 4.0 ) and $( 8.0 ), respectively

22.6 ( 12.8 ) ( 25.4 )

Foreign currency translation adjustment 82.0 0.9 9.0

Other comprehensive loss

Other comprehensive income (loss) 130.7 ( 24.9 ) ( 16.4 )

Comprehensive income $ 3,075.4 $ 213.5 $ 450.3

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Prepaid expense and other current assets 179.3 152.5

Assets held-for-sale (Note 3) 89.2 —

Total current assets 1,465.3 1,274.2

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accumulated depreciation and amortization 1,308.1 1,192.9

1,347.6 1,281.9

Operating lease right-of-use assets (Note 2) 257.0 260.2

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Deferred tax assets 2,546.6 80.1

Other assets 144.2 104.8

Total assets $ 9,606.2 $ 6,737.5

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Other current liabilities 301.7 266.8

Liabilities held-for-sale (Note 3) 1.7 —

Total current liabilities 732.1 1,004.4

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Stockholders’ equity:

Preferred stock, 10 cents par value, shares authorized:

zero shares issued or outstanding

Common stock, 10 cents par value, shares authorized:

issued 53.4 at October 31, 2020 and 53.2 at October 31, 2019

Preferred stock, $ 10 cents par value, 1.0 shares authorized, zero shares issued or outstanding

Common stock, $ 10 cents par value, 120.0 shares authorized, 53.7 issued and 49.3 outstanding at October 31, 2021 and 53.4 issued and 49.1 outstanding at October 31, 2020

Additional paid-in capital 1,715.2 1,646.8

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4.4 shares at October 31, 2021 and 4.3 shares at October 31, 2020

( 639.6 ) ( 617.3 )

Total Cooper stockholders' equity 6,941.8 3,824.6

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Consolidated Statements of Stockholders' Equity

Common Shares

Treasury Stock

Additional Paid-In Capital

Common Shares Treasury Stock Additional Paid-In Capital Accumulated

Comprehensive

Income (Loss)

Retained Earnings

Treasury Stock

Noncontrolling Interests

Income (Loss) Retained Earnings Treasury Stock Noncontrolling Interests Total

Stockholders'

(In millions)

(In millions) Shares Amount Shares Amount

Balance at October 31, 2018 49.2 $ 5.0 3.6 $ 0.3 $ 1,572.1 $ ( 430.7 ) $ 2,576.0 $ ( 415.1 ) $ 0.2 $ 3,307.8

Net income attributable to Cooper stockholders — — — — — — 466.7 — — 466.7

Other comprehensive income, net of tax

Other comprehensive loss, net of tax — — — — — ( 16.4 ) — — — ( 16.4 )

Issuance of common stock for stock plans, net 0.4 — — — 7.8 — — — — 7.8

Dividends on common stock

Treasury stock repurchase ( 0.5 ) ( 0.1 ) 0.5 0.1 — — — ( 156.1 ) — ( 156.1 )

Dividends on common stock ($ 0.03 per share)

— — — — — — ( 3.0 ) — — ( 3.0 )

Share-based compensation expense — — — — 35.1 — — — — 35.1

ASU 2016-16 adoption — — — — — — ( 13.3 ) — — ( 13.3 )

Noncontrolling interests

Balance at October 31, 2019 49.1 $ 4.9 4.1 $ 0.4 $ 1,615.0 $ ( 447.1 ) $ 3,026.4 $ ( 571.2 ) $ 0.2 $ 3,628.6

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Issuance of common stock for stock plans, net 0.2 — — — ( 6.8 ) — — — — ( 6.8 )

Issuance of common stock for employee stock purchase plan — — — — 1.8 — — 1.7 — 3.5

Treasury stock repurchase ( 0.2 ) — 0.2 — — — — ( 47.8 ) — ( 47.8 )

Dividends on common stock

Dividends on common stock ($ 0.03 per share)

— — — — — — ( 3.0 ) — — ( 3.0 )

Share-based compensation expense — — — — 36.8 — — — — 36.8

ASU2016-16 adoption

Balance at October 31, 2020 49.1 $ 4.9 4.3 $ 0.4 $ 1,646.8 $ ( 472.0 ) $ 3,261.8 $ ( 617.3 ) $ 0.2 $ 3,824.8

Net income attributable to Cooper stockholders — — — — — — 2,944.7 — — 2,944.7

Other comprehensive loss, net of tax

Other comprehensive income, net of tax — — — — — 130.7 — — — 130.7

Issuance of common stock for stock plans, net 0.3 0.1 — — 20.4 — — — — 20.5

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Treasury stock repurchase ( 0.1 ) — 0.1 — — — — ( 24.8 ) — ( 24.8 )

Dividends on common stock

Dividends on common stock ($ 0.03 per share)

— — — — — — ( 3.0 ) — — ( 3.0 )

Share-based compensation expense — — — — 43.8 — — — — 43.8

ASU 2016-13 adoption — — — — — — ( 1.4 ) — — ( 1.4 )

Balance at October 31, 2021 49.3 $ 5.0 4.4 $ 0.4 $ 1,715.2 $ ( 341.3 ) $ 6,202.1 $ ( 639.6 ) $ 0.2 $ 6,942.0

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(In millions)

2021 2020 2019

Cash flows from operating activities:

Net income $ 2,944.7 $ 238.4 $ 466.7

Adjustments to reconcile net income to net cash provided by operating activities:

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Impairment of intangibles — — 0.4

Gain on sale of an intangible (Note 3)

Gain on sale of an intangible — — ( 19.0 )

Share-based compensation expense 43.8 37.6 35.1

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Non-cash operating lease expense 31.8 32.5 —

Impairment and loss on disposal of property, plant and equipment

Impairment and loss on disposal of property, plant and equipment, and other ( 3.1 ) 24.4 7.7

Change in fair value of contingent consideration 66.1 — —

Deferred income taxes ( 2,502.2 ) ( 0.9 ) ( 15.9 )

Provision for doubtful accounts ( 2.5 ) ( 6.2 ) ( 2.6 )

CCA cost amortization

Cloud computing arrangements cost amortization 2.0 0.5 —

Interest income on convertible note ( 3.4 ) ( 1.0 ) —

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Accounts receivable ( 75.5 ) 8.5 ( 55.6 )

Inventories ( 9.2 ) ( 62.3 ) ( 37.3 )

Other assets ( 69.1 ) ( 41.1 ) 39.8

Operating lease right-of-use assets and liabilities, net ( 27.5 ) ( 20.0 ) —

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Debt acquisition costs ( 0.1 ) ( 5.6 ) ( 0.4 )

Payment of contingent consideration

Proceeds from construction allowance — 2.1 —

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(In millions) 2021 2020 2019

Net cash (used in) provided by financing activities

Net cash used in financing activities ( 311.4 ) ( 95.5 ) ( 351.4 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 2.9 0.7 ( 1.2 )

Net increase (decrease) in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents, restricted cash and cash held for sale ( 20.2 ) 27.3 9.3

Cash, cash equivalents and restricted cash at beginning of year 116.8 89.5 80.2

Cash, cash equivalents and restricted cash at end of year

Cash, cash equivalents, restricted cash and cash held for sale at end of year $ 96.6 $ 116.8 $ 89.5

Supplemental disclosures of cash flow information:

Cash paid for:

Interest $ 28.4 $ 46.5 $ 75.3

Income taxes $ 63.2 $ 51.1 $ 39.2

Reconciliation of cash flow information:

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Restricted cash included in other current assets 0.4 0.9 0.5

Total cash, cash equivalents, and restricted cash

Cash held for sale 0.3 — —

Total cash, cash equivalents, restricted cash and cash held for sale $ 96.6 $ 116.8 $ 89.5

The accompanying notes are an integral part of these Consolidated Financial Statements.

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As a result of healthcare systems responding to the demands of managing the pandemic, governments around the world imposing measures designed to reduce the transmission of the COVID-19 virus, and individuals responding to the concerns of contracting the COVID-19 virus, many optical practitioners & retailers, hospitals, medical offices and fertility clinics closed their facilities, restricted access, or delayed or canceled patient visits, exams and elective medical procedures, and many customers that have reopened are experiencing reduced patient visits.

This has had, and we believe will continue to have, an adverse effect on our sales, operating results and cash flows.

These factors have had, and in the future may have, an adverse effect on our sales, operating results and cash flows.

The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of net sales and expenses during the reporting period.

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The extent to which the COVID-19 pandemic and related economic disruptions impact our business and financial results will depend on future developments including, but not limited to, the continued spread, duration and severity of the COVID-19 pandemic;

the occurrence, spread, duration and severity of any subsequent wave or waves of outbreaks;

the occurrence, spread, duration and severity of any subsequent wave or waves of outbreaks, including the emergence and spread of variants of the COVID-19 virus;

the actions taken by the U.S.

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• allowance for doubtful accounts and credit losses

carrying value of inventory

• the carrying value of inventory

• the carrying value of goodwill and other long-lived assets

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Adjustments will be made to these provisions periodically to reflect new facts and circumstances that may indicate that historical experience may not be indicative of current and/or future results.

The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material changes to the estimates and material impacts to the Company’s Consolidated Financial Statements in future reporting periods.

The Company’s future assessment of the magnitude and duration of COVID-19, as well as other

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

factors, could result in material changes to the estimates and material impacts to the Company’s Consolidated Financial Statements in future reporting periods.

Significant Accounting Policies

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These reserves are based on the amounts earned or to be claimed on the related sales and are classified primarily in current liabilities.

Variable consideration is estimated based on the most likely amount or expected value approach, depending on which method the Company expects to better predict the amount of consideration to which it will be entitled.

Variable consideration is estimated based on the most likely amount or expected value approach, depending on which method the

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

Company elects one of the methods to estimate variable consideration for a particular type of performance obligation, the Company applies that method consistently.

Company expects to better predict the amount of consideration to which it will be entitled.

Once the Company elects one of the methods to estimate variable consideration for a particular type of performance obligation, the Company applies that method consistently.

Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.

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CooperSurgical rebates are predominately related to the Medicaid rebate provision that is estimated based upon contractual terms, historical experience, and trend analysis.

Contract balances

The timing of billing and revenue recognition primarily occurs simultaneously.

The Company does not have material contract assets or liabilities.

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

Contract balances

The timing of billing and revenue recognition primarily occurs simultaneously.

The Company does not have material contract assets or liabilities.

• Leases - We consider an arrangement a lease if the arrangement transfers the right to control the use of an identified asset in exchange for consideration.

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These assets and liabilities are recognized at the commencement of the lease based upon the present value of the future minimum lease payments over the lease term.

The lease term reflects the noncancelable period of the lease together with periods covered by an option to extend or terminate the lease when management is reasonably certain that it will exercise such option.

Changes in the lease term assumption could impact the right-of-use assets and lease liabilities recognized on the balance sheet.

The lease term reflects the noncancellable period of the lease together with periods covered by an option to extend or terminate the lease when management is reasonably certain that it will exercise such option.

Changes in the lease term assumption could impact the right-of-use assets and lease liabilities recognized on the Consolidated Balance Sheets.

As our leases typically do not contain a readily determinable implicit rate, we determine the present value of the lease liability using our incremental borrowing rate at the lease commencement date based on the lease term on a collateralized basis.

Net realizable value of inventory - In assessing the value of inventories, we make estimates and judgments regarding aging of inventories and other relevant issues potentially affecting the saleable condition of products and estimated prices at which those products will sell.

On an ongoing basis, we review the carrying value of our inventory, measuring number of months on hand and other indications of saleability.

• Net realizable value of inventory - In assessing the value of inventories, we make estimates and judgments regarding aging of inventories and other relevant issues potentially affecting the salable condition of products and estimated prices at which those products will sell.

On an ongoing basis, we review the carrying value of our inventory, measuring number of months on hand and other indications of salability.

We reduce the value of inventory if there are indications that the carrying value is greater than net realizable value, resulting in a new, lower-cost basis for that inventory.

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Results of operations for acquired companies are included in our consolidated results of operations from the date of acquisition.

We recognize separately from goodwill, the identifiable assets acquired, including acquired in-process research and development, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date fair values as defined by accounting standards related to fair value measurements.

Key assumptions routinely utilized in allocation of purchase price to intangible assets include projected financial information such as revenue projections for companies acquired.

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

acquisition date, goodwill is measured as the excess of consideration given, over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed.

Key assumptions routinely utilized in allocation of purchase price to intangible assets include projected financial information such as revenue projections for companies acquired.

As of the acquisition date, goodwill is measured as the excess of consideration given, over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed.

Direct acquisition costs are expensed as incurred.

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In determining the expected volatility, management considers implied volatility from publicly-traded options on Cooper's common stock at the date of grant, historical volatility and other factors.

The risk-free interest rate is based on the continuous rates provided by the United States Treasury with a term equal to the expected life of the award.

The dividend yield is based on the projected annual dividend payment per share, divided by the stock price at the date of grant.

As share-based compensation expense recognized in our Consolidated Statements of Income is based on awards ultimately expected to vest, the amount of expense has been reduced for estimated

The risk-free interest rate is based on the continuous rates

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

provided by the United States Treasury with a term equal to the expected life of the award.

The dividend yield is based on the projected annual dividend payment per share, divided by the stock price at the date of grant.

As share-based compensation expense recognized in our Consolidated Statements of Income is based on awards ultimately expected to vest, the amount of expense has been reduced for estimated forfeitures.

Forfeitures are estimated at the time of grant, based on historical experience, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

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Accounting Pronouncements Recently Adopted

In May 2020, the SEC adopted the final rule under SEC release No.

33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses , amending Rule 1-02(w)(2) which includes amendments to certain of its rules and forms related to the disclosure of financial information regarding acquired or disposed businesses.

Among other changes, the amendments impact SEC rules relating to (1) the definition of “significant” subsidiaries, (2) requirements to provide financial statements for “significant” acquisitions, and (3) revisions to the formulation and usage of pro forma financial information.

The final rule is effective on January 1, 2021;

however, voluntary early adoption is permitted.

The Company early adopted the provisions of the final rule in the third quarter of fiscal 2020.

The guidance did not have a material impact on the Company’s consolidated financial statements and disclosures.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) .

ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases.

A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use (ROU) asset representing its right to use the underlying asset for the lease term.

For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases Topic 842 Target improvements, which provides an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings.

In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements , which further clarifies the determination of fair value of the underlying asset by lessors that are not manufacturers or dealers and modifies transition disclosure requirements for changes in accounting principles and other technical updates.

We adopted this standard using the optional transition method and recorded an adjustment to the Consolidated Balance Sheet on November 1, 2019.

We have implemented changes to certain business processes, systems and internal controls to support adoption of the new standard and the related disclosure requirements, including the implementation of a third-party leasing software solution.

We elected the package of transition expedients, which allows us to keep our existing lease classifications and not reassess whether any existing contracts as of the date of adoption are leases or contain leases and not reassess initial direct costs.

In addition, we elected the practical expedients to combine lease and non-lease components for our leases, and for leases with an initial term of 12 months or less to recognize the associated lease payments in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.

As of October 31, 2020, the aggregate balances of lease right-of-use assets and lease liabilities were $ 260.2 million and $ 270.1 million , respectively.

The standard did not affect our Consolidated Statements of Income and Comprehensive Income.

We will continue to disclose comparative reporting periods prior to November 1, 2019 under the previous accounting guidance, ASC 840 Leases.

Accounting Pronouncements Issued Not Yet Adopted

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments-Credit Losses (Topic 326):

In January 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 .

This guidance addresses accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities.

This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020.

Early adoption is permitted.

The Company early adopted this guidance in the second quarter of fiscal 2021, and it did not have a material impact on our Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance:

ASU 2018-19 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses ”, ASU 2019-04 “ Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Hedging, and Topic 825, Financial Instruments” , ASU 2019-05 “ Financial Instruments-Credit Losses ”, ASU 2019-11 “ Codification Improvements to Topic 326, Financial Instruments - Credit Losses” (collectively, Topic 326), ASU 2020-02 Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842) and ASU 2020-03 Codification Improvements to Financial Instruments.

ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments-Credit Losses , ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , ASU 2019-05 Financial Instruments-Credit Losses , ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments—Credit Losses , ASU 2020-02 Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842) and ASU 2020-03 Codification Improvements to Financial Instruments (collectively, “Topic 326”).

Topic 326 requires measurement and recognition of expected credit losses for financial assets held.

Topic 326 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, which means it will be effective for our fiscal year beginning November 01, 2020.

Early adoption is permitted.

The Company believes that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses.

We continue to monitor the economic implications of the COVID-19 pandemic, however based on current market conditions and as credit losses from the Company's trade receivables have not historically been significant, the Company anticipates that the adoption of the ASU will not have a material impact on the consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808), Clarifying the Interaction between Topic 808 and Topic 606.

Topic 326 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019.

The Company adopted this guidance in the first quarter of fiscal 2021 on a modified retrospective basis, and the most notable impact was related to the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses.

The Company recorded a cumulative-effect adjustment of $ 1.4 million to the Consolidated Balance Sheets on November 1, 2020.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808):

Clarifying the Interaction between Topic 808 and Topic 606.

This guidance amended Topic 808 and Topic 606 to clarify that transactions in a collaborative arrangement should be accounted for under Topic 606 when the counterparty is a customer for a distinct good or service (i.e., unit of account).

The amendments preclude an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, which means it will be effective for our fiscal year beginning November 1, 2020.

Early adoption is permitted.

The adoption of this guidance will not have a material impact on our Consolidated Financial Statements.

This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019.

The Company adopted this guidance on November 1, 2020, and it did not have a material impact on our Consolidated Financial Statements.

Accounting Pronouncements Issued Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

Simplifying the Accounting for

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Income Taxes .

This guidance removes certain exceptions to the general principles in Topic 740 and enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law.

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We are currently evaluating the impact of ASU 2019-12 on our Consolidated Financial Statements, which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2021.

In January 2020, the FASB issued ASU 2020-01 Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.

This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020.

Early adoption is permitted.

We are currently evaluating the impact of ASU 2020-01 on our Consolidated Financial Statements, which is effective for the Company in our fiscal year and interim periods beginning on November 1, 2021.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform ( Topic 848 ):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting and subsequent amendment to the initial guidance:

ASU 2021-01, Reference Rate Reform (Topic 848):

Scope (collectively, “Topic 848”).

Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The guidance generally can be applied from March 12, 2020 through December 31, 2022.

We are currently assessing the impacts of the practical expedients provided in ASU 2020-04 and which, if any, we will adopt.

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Notes to Consolidated Financial Statements

We are currently assessing the impacts of the practical expedients provided in Topic 848 and which, if any, we will adopt.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) .

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We are currently evaluating the impact of ASU 2020-06 on our Consolidated Financial Statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

This update requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers .

This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2022 and should be applied prospectively to business combinations occurring on or after the effective date of the standard.

Early adoption is permitted, including adoption in an interim period.

We are currently evaluating the impact of ASU 2021-08 on our Consolidated Financial Statements.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance .

This update requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy.

This standard is effective for fiscal years beginning after December 15, 2021 and should be applied either prospectively or retrospectively.

Early adoption is permitted.

We are currently evaluating the impact of ASU 2021-10 on our Consolidated Financial Statements.

No other recently issued accounting pronouncements had or are expected to have a material impact on our Consolidated Financial Statements.

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We translate these assets and liabilities into United States dollars at year-end exchange rates.

We translate income and expense accounts at average rates for each month.

We translate income

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Notes to Consolidated Financial Statements

and expense accounts at average rates for each month.

We record gains and losses from the translation of financial statements in foreign currencies into United States dollars in other comprehensive income.

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Such lens fitting sets generally consist of a physical binder or rack to store contact lenses and an array of lenses.

We record the costs associated with the original fitting set to other long-term assets on our Consolidated Balance Sheet.

We record the costs associated with the original fitting set to other long-term assets on our Consolidated Balance Sheets.

We amortize such costs over their estimated useful lives to selling, general and administrative expense on our Consolidated Statements of Income.

We also expense the cost for lenses provided to practitioners as replenishment for fitting sets in the period shipped to selling, general and administrative expense on our Consolidated Statements of Income.

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Notes to Consolidated Financial Statements

Cash and Cash Equivalents

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Finished goods 433.9 407.0

$ 585.6 $ 570.4

Inventories are stated at the lower of cost or net realizable value.

Cost is computed using standard cost that approximates actual cost, on a first-in, first-out basis.

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Notes to Consolidated Financial Statements

Property, Plant and Equipment

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Accumulated depreciation 1,308.1 1,192.9

$ 1,347.6 $ 1,281.9

Property, plant and equipment are stated at cost.

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We depreciate buildings over 30 to 40 years and machinery and equipment over 3 to 15 years.

We expense costs for maintenance and repairs and capitalize major replacements, renewals and betterments.

We expense costs for maintenance and repairs and capitalize major replacements, renewals and improvements.

We eliminate the cost and accumulated depreciation of depreciable assets retired or otherwise disposed of from the asset and accumulated depreciation accounts and reflect any gains or losses in operations for the period.

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At October 31, 2021 and 2020, the number of shares in treasury was approximately 4.4 million and 4.3 million , respectively.

The Company purchased 161 thousand shares during the year ended

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Notes to Consolidated Financial Statements

October 31, 2020 and 537 thousand shares during the year ended October 31, 2019.

The Company purchased 70 thousand shares during the year ended October 31, 2021 and 161 thousand shares during the year ended October 31, 2020.

Stockholders' Equity for additional information on the share repurchase program.

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Options to extend the lease term are included in the lease term when it is reasonably certain that the Company will exercise the extension option.

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Notes to Consolidated Financial Statements

The Company’s operating leases typically include non-lease components such as common-area maintenance costs.

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Non-lease components that are not fixed are expensed as incurred as variable lease payments.

Leases with a term of one year or less are not recognized on the Consolidated Balance Sheet, while the associated lease payments are recorded in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.

Commitments under finance lease arrangements of $ 2.4 million as of October 31, 2020 are not significant and are not included in the disclosure tables below.

The following table presents information about leases on the Consolidated Balance Sheet:

Leases with a term of one year or less are not recognized on the Consolidated Balance Sheets, while the associated lease payments are recorded in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.

Commitments under finance lease arrangements of $ 2.0 million and $ 2.4 million as of October 31, 2021 and October 31, 2020, respectively, are not significant and are not included in the disclosure tables below.

The following table presents information about leases on the Consolidated Balance Sheets:

(In millions) 2021 2020

October 31, 2020

Operating Leases

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Weighted average discount rate 3 % 3 %

The following table presents information about lease expense, which is included in selling, general and administrative expenses in the Consolidated Statement of Income and Comprehensive Income:

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Notes to Consolidated Financial Statements

The following table presents information about lease expense, which is included in selling, general and administrative expenses in the Consolidated Statements of Income:

(In millions) 2021 2020

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Prior to fiscal 2020, we accounted for our leases in accordance with ASC 840, Leases .

Under ASC 840, rental expense for operating leases was $ 45.3 million and $ 38.8 million for fiscal 2019 and 2018, respectively.

Under ASC 840, rental expense for operating leases was $ 45.3 million for fiscal 2019.

Supplemental Cash Flow Information

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Operating lease right-of-use assets obtained in exchange for lease obligations $ 26.5 $ 17.7

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Notes to Consolidated Financial Statements

Maturity of Lease Liabilities

The minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of October 31, 2020 are:

The minimum rental payments required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of October 31, 2021 are:

(In millions)

Thereafter 146.3

Total lease payments $ 317.6

interest 50.2

Present value of lease liabilities $ 267.4

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Notes to Consolidated Financial Statements

Acquisitions and Assets Held for Sale

The following is a summary of the allocation of the total purchase consideration for business and asset acquisitions that the Company completed during fiscal 2021, 2020, and 2019:

(In millions) 2021 2020 2019

Technology $ 178.6 $ — $ 12.3

In-Process Research & Development (IPR&D) 20.0 — —

Customer relationships 7.5 11.4 7.5

Composite intangible asset

Trademarks 1.3 5.1 10.2

Other 0.6 3.9 0.1

Total identifiable intangible assets $ 208.0 $ 20.4 $ 30.1

Goodwill 91.6 15.3 29.8

Net tangible (liabilities) assets ( 10.8 ) ( 0.3 ) 7.3

Total purchase price

Fair value of contingent consideration ( 39.1 ) — —

Total closing purchase price $ 249.7 $ 35.4 $ 67.2

All acquisitions were funded by cash generated from operations or facility borrowings.

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Fiscal Year 2021

On May 3, 2021, CooperSurgical completed the acquisition of a privately-held medical device company that develops single-use illumin ating medical devices.

The purchase price allocation is preliminary, and the Company is in the process of finalizing information primarily related to the valuation of intangible assets and inventory, the associated deferred tax adjustments and the corresponding impact on goodwill.

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Notes to Consolidated Financial Statements

On April 26, 2021, CooperVision completed the acquisition of a privately-held UK contact lens manufacturer focusing on specialty contact lenses.

This acquisition expands CooperVision’s specialty eye care portfolio and accelerates its development of myopia management solutions in the UK.

On March 1, 2021, CooperSurgical completed the acquisition of a privately-held medical device company that designed and developed an innovative obstetric product for use in urgent obstetrics to reduce risks associated with childbirth.

The purchase price allocation is preliminary, and the Company is in the process of finalizing information primarily related to the valuation of intangible assets, the associated deferred tax adjustments and the corresponding impact on goodwill.

On February 1, 2021, CooperSurgical acquired all of the remaining equity interests of a privately-held medical device company that developed the Mara ® Water Vapor Ablation System, which is used for endometrial ablation.

The Company accounted for this acquisition as an asset acquisition, whereby the Company allocated the total cost of the acquisition to the net assets acquired on the basis of their estimated relative fair values on the acquisition date with no goodwill recognized.

The primary asset acquired in this asset acquisition is Technology.

On January 19, 2021, CooperVision acquired all of the remaining equity interests of a privately-held medical device company that develops spectacle lenses for myopia management.

The fair value remeasurement of our previous equity investment immediately before the acquisition resulted in a gain of $ 11.5 million, which was recorded in other income.

The terms of the acquisition include upfront cash consideration paid at closing of approximately $ 40.9 million attributable to the equity interests not held by the Company on the closing date.

The transaction also includes potential payments of future consideration that are contingent upon the achievement of the regulatory approval milestone (the regulatory approval payment) and the acquired business reaching certain revenue thresholds over a specified period (the revenue pa yments).

The undiscounted rang e of the contingent consideration is zero to $ 139.1 million payable to the other former equity interest owners.

The estimated fair value of the contingent consideration on the acquisition date was approximately $ 37.9 million, and, accordingly, the Company recorded a liability of approximately $ 30.2 million, which represents the fair value of the contingent consideration payable to the other former equity interest owners.

The fair value of the regulatory approval payment was determined using an option pricing framework based on the expected payment under the contractual terms and the estimates of the probability of achieving the regulatory approval.

The fair value of the revenue payments was determined using a Monte Carlo simulation based on the revenue projections and the expected payment for each simulation.

As of October 31, 2021, no contingent consideration has been paid.

The Company remeasured the fair value of the contingent consideration at each reporting period.

In fiscal 2021, a $ 56.8 million expense was recognized in selling, general and administrative expense in the Consolidated Statements of Income, resulting from the increase in fair value of the contingent consideration.

This was primarily driven by increases in revenue projections, which increased the estimated fair value of the revenue payments.

On December 31, 2020, CooperSurgical completed the acquisition of a privately-held in vitro fertilization (IVF) cryo-storage software solutions compa ny.

The pro forma results of operations of these acquisitions have not been presented because the effect of the business combinations described above was not material to the consolidated results of operations.

Subsequent Events

On November 6, 2021, subsequent to the fiscal year ended October 31, 2021, CooperSurgical entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire Generate Life Sciences, a privately held leading provider of donor egg and sperm for fertility treatments, fertility cryopreservation services and newborn stem cell (cord blood and cord tissue) storage.

The aggregate consideration is $ 1.605 billion in cash,

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Notes to Consolidated Financial Statements

subject to adjustment as set forth in the Merger Agreement.

The transaction is anticipated to close in the first quarter of fiscal 2022 and is subject to customary closing conditions, including regulatory approval.

Subsequent Events for more details.

Fiscal Year 2020

On August 7, 2020, CooperVision completed the acquisition of a privately-held U.S contact lens manufacturer focusing on ortho-k lenses.

This acquisition expands CooperVision’s specialty eye care portfolio and its leadership in addressing the increasing severity and prevalence of myopia.

The purchase price allocation is preliminary and the Company is in the process of finalizing information and the corresponding impact on goodwill.

On December 13, 2019, CooperSurgical completed the acquisition of a privately-held distributor of in vitro fertilization (IVF) medical devices and systems.

The pro forma results of operations have not been presented because the effect of the business combinations described above were not material to our consolidated results of operations.

Fiscal Year 2019

Purchase price allocation for the acquisitions in fiscal year 2019 are completed.

On December 31, 2018, CooperSurgical completed the acquisition of a privately-held U.S.

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On December 28, 2018, CooperVision completed the acquisition of a privately-held scleral lens company, which expands CooperVision's specialty and scleral lens portfolio.

The pro forma results of operations of these acquisitions have not been presented because the effects of the business combinations described above, individually and in the aggregate, were not material to the reported consolidated financial results.

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Notes to Consolidated Financial Statements

Fiscal Year 2018

On November 1, 2017, CooperSurgical acquired the assets of the PARAGARD Intrauterine Device (IUD) business (PARAGARD) from Teva Pharmaceuticals Industries Limited for $ 1.1 billion .

This asset acquisition broadened and strengthened CooperSurgical's product portfolio.

PARAGARD® is the only hormone-free, long lasting, reversible contraceptive approved by the United States Food and Drug Administration (FDA) available in the United States.

The Company has accounted for the acquisition of PARAGARD as a purchase of assets in accordance with ASC Topic 805, Business Combinations, and ASU No.

2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business , whereby the Company recognized assets acquired based on their estimated relative fair values on the acquisition date.

Due to the required screening test, the acquisition does not meet the definition of a business as substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset.

The Company retained independent appraisers to advise management in the determination of the relative fair value of the various assets acquired and liabilities assumed.

The values assigned in these financial statements represent management’s best estimate of relative fair values as of the acquisition date.

The following table summarizes the relative fair values of net assets acquired and liabilities assumed using the cost accumulation and allocation model:

Contingent Consideration

Certain of the Company’s business combinations involve potential payments of future consideration that are contingent upon the achievement of regulatory milestones and/or the acquired business reaching certain revenue thresholds.

A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date.

The fair value of the contingent consideration is remeasured at each reporting period, and the change in fair value is recognized in selling, general and administrative expense in the Consolidated Statements of Income.

The following table provides a reconciliation of the beginning and ending balances of contingent consideration:

(In millions) 2021 2020

Relative Fair Value

Composite intangible asset (1)

Assembled workforce intangible asset (2)

Property, plant and equipment

Inventory (3)

Total assets acquired

liabilities assumed

Total Purchase Price

The Company proportionally allocated the acquisition costs to the net assets acquired.

The acquisition-related costs included advisory, legal, valuation and other professional fees.

(1) Composite Intangible asset consists of technology, trade name, New Drug Application (NDA) approval and physician relationships, which have been valued as a single composite intangible asset as they are inextricably linked.

The composite asset was identified as the primary asset acquired, was valued using the Multi-Period Excess Earnings Method and will be amortized over 15 years .

(2) An assembled workforce was recognized as a separate acquired intangible asset, given the purchase of assets and will be amortized over 5 years .

(3) Inventory relative fair value includes step up of $ 45.4 million .

As PARAGARD was considered an asset purchase as opposed to a business acquisition in accordance with the guidance under ASC 805, Business Combinations, and ASU No.

2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business , the Company has not included proforma financial information which is applicable for a business acquisition.

Beginning balance $ — $ —

Purchase price contingent consideration 31.3 —

Change in fair value 66.1 —

Ending balance $ 97.4 $ —

Assets Held for Sale

On February 2, 2021, CooperVision entered into a stock purchase agreement to sell 50 % of the equity interest in a wholly-owned subsidiary that was acquired by CooperVision on January 19, 2021.

The closing of this transaction is subject to certain closing conditions including required regulatory approvals.

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

Other Acquisitions

On April 3, 2018, CooperSurgical completed the acquisition of a privately held company that specializes primarily in in-vitro fertilization (IVF) media.

This acquisition product categories include media products as well as IVF laboratory air filtration products and dishware.

On January 4, 2018, CooperVision acquired a long-standing distribution partner, with a leading position in the distribution of contact lenses to the Optical and Pharmacy sector in Israel.

On December 1, 2017, CooperVision acquired a leading provider of orthokeratology (ortho-k) specialty contact lenses and oxygen permeable rigid contact lens materials.

ortho-k contact lenses are overnight lenses which enable corneal topography correction for myopia (nearsightedness) patients.

intends to operate the previously wholly-owned subsidiary as a joint venture with the purchaser of the 50 % interest once the transaction is closed.

The Company concluded the substantive terms of the joint venture during the third quarter of fiscal 2021, and the assets and liabilities of this disposal group were reclassified as held for sale as of July 31, 2021.

On August 1, 2021, CooperVision entered into a stockholders agreement, which outlines the terms regarding the operation and management of the joint venture.

As of October 31, 2021, the Company was in the process of finalizing the joint venture related ancillary agreements, and the disposal group continues to be classified as held for sale as of October 31, 2021.

Pursuant to ASC 360, assets held for sale were measured at the lower of their carrying amounts or fair value less cost to sell.

The Company did no t record any impairment in fiscal 2021.

The Company has determined that this disposal did not qualify as a discontinued operation as the sale was deemed to not be a strategic shift that has or will have a major effect on the Company's operations and financial results.

Included in the Company's Consolidated Balance Sheets as of October 31,2021 are the following carrying amounts of the assets and liabilities held for sale:

(In millions) October 31, 2021

Goodwill 23.2

Other intangibles, net 83.6

Deferred tax assets ( 19.9 )

Other assets 2.0

Total assets held-for-sale $ 89.2

Total liabilities held-for-sale $ 1.7

Intangible Assets

(In millions)

CooperSurgical

(In millions) CooperVision CooperSurgical Total

Balance at October 31, 2019 $ 1,765.4 $ 663.5 $ 2,428.9

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Net additions 30.2 61.4 91.6

Amount reclassified to assets held for sale (Note 3) ( 23.2 ) — ( 23.2 )

Foreign currency translation adjustment 54.7 3.6 58.3

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Of the October 31, 2020 goodwill balance, $ 134.2 million for CooperSurgical and $ 26.9 million for CooperVision was expected to be deductible for tax purposes.

The Company evaluates goodwill annually during the fiscal third quarter and whenever an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

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Notes to Consolidated Financial Statements

The Company evaluates goodwill for impairment annually during the fiscal third quarter and when an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

The Company accounts for goodwill, evaluates and tests goodwill balances for impairment in accordance with related accounting standards.

The Company performed its annual impairment assessment in the third quarter of each of fiscal 2020 and 2019, which indicated that there was no impairment of goodwill in reporting units at either time.

The Company performed an annual impairment assessment in the third quarter of fiscal 2021 and 2020, and its analysis indicated that there was no impairment of goodwill in its reporting units.

Qualitative factors considered in the assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit.

Based on our qualitative assessment, if we determine that the fair value of a reporting unit is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value of the reporting unit.

Based on the Company's qualitative assessment, if the Company determines that the fair value of a reporting unit is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value of the reporting unit.

A reporting unit is the level of reporting at which goodwill is tested for impairment.

Our reporting units are CooperVision, Office/Surgical and Fertility, which reflects the current way we manage our business.

The Company has three reporting units:

CooperVision and within the CooperSurgical segment, Office/Surgical and Fertility, reflecting the current way the Company manages its business.

Goodwill impairment analysis and measurement is a process that requires significant judgment.

If our common stock price trades below book value per share, there are changes in market conditions or a future downturn in our business, or a future goodwill impairment test indicates an impairment of our goodwill, we may have to recognize a non-cash impairment of goodwill that could be material and could adversely affect our results of operations in the period recognized and also adversely affect our total assets and stockholders' equity.

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Notes to Consolidated Financial Statements

If the Company's common stock price trades below book value per share, there are changes in market conditions or a future downturn in its business, or a future goodwill impairment test indicates an impairment of its goodwill, the Company may have to recognize a non-cash impairment of goodwill that could be material and could adversely affect the Company's results of operations in the period recognized and also adversely affect its total assets and stockholders' equity.

Other Intangible Assets

October 31, 2020

October 31, 2019

(In millions)

Weighted Average Amortization Period (in years)

October 31, 2021 October 31, 2020

(In millions) Gross

Amount Accumulated

Amortization Gross

Amount Accumulated

Amortization Weighted Average Amortization Period (in years)

Intangible assets with definite lives:

Trademarks $ 156.7 $ 49.1 $ 153.4 $ 37.7 14

Composite intangible asset 1,061.8 283.2 1,061.9 212.4 15

Technology 513.0 287.9 401.2 251.9 10

Customer relationships 378.4 240.1 367.0 216.2 13

License and distribution rights and other 33.4 21.6 31.8 18.2 10

2,143.3 $ 881.9 2,015.3 $ 736.4 14

accumulated amortization and translation

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Intangible assets with indefinite lives, net (1)

Total other intangible assets, net

Total other intangibles, net $ 1,271.5 $ 1,289.0

(1) Intangible assets with indefinite lives include technology and trademarks.

Balances include foreign currency translation adjustments.

In the second quarter of fiscal 2019, CooperSurgical sold an exclusive distribution right to distribute Filshie Clip System in the U.S.

for $ 21.0 million and recognized a gain of $ 19.0 million .

As of October 31, 2020, the estimation of amortization expenses for intangible assets with definite lives is as follows:

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Notes to Consolidated Financial Statements

Intangible assets with definite lives are amortized over the estimated useful life of the assets.

As of October 31, 2021, the estimate of future amortization expenses for intangible assets with definite lives is as follows:

Fiscal years:

(In millions)

Thereafter 690.4

Total remaining amortization for intangible assets with definite lives $ 1,261.4

The Company assesses definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of a definite-lived intangible asset (asset group) may not be recoverable.

When events or changes in circumstances indicate that the carrying amount of a definite-lived intangible asset may not be recoverable, the Company evaluates whether the definite-lived intangible asset is impaired by comparing its carrying value to its undiscounted future cash flows.

When events or changes in circumstances indicate that the carrying amount of a definite-lived intangible asset may not be recoverable, in accordance with related accounting standards, the Company evaluates whether the definite-lived intangible asset is impaired by comparing its carrying value to its undiscounted future cash flows.

The Company assesses indefinite-lived intangible assets annually in the third quarter of the fiscal year, or whenever events or circumstances indicate that the carrying amount of an indefinite-lived intangible asset (asset group) may not be recoverable.

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The inputs used in the fair value analysis fall within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value.

The Company performs impairment tests using an

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Notes to Consolidated Financial Statements

income approach, more specifically a relief from royalty method.

The Company performs impairment tests using an income approach, more specifically a relief from royalty method.

In the development of the forecasted cash flows, the Company applies significant management judgment to determine key assumptions, including revenue growth and operating margin growth, royalty rates and discount rates assumptions.

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Given the general deterioration in economic and market conditions surrounding the COVID-19 pandemic, the Company considered the impact that the COVID-19 pandemic may have on its near and long-term forecasts and determined that it was not more likely than not that the fair value of reporting units or relevant asset groups was below carrying amounts, and therefore the Company determined that there was no impairment to either its goodwill, definite-lived or indefinite-lived intangible assets during fiscal 2021.

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Notes to Consolidated Financial Statements

(In millions)

Overdraft and other credit facilities $ 83.0 $ 59.4

Term loans — 350.0

unamortized debt issuance cost ( 0.1 ) ( 0.1 )

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Revolving credit $ 546.1 $ 534.0

Term loans 850.0 850.0

Other 0.2 0.2

unamortized debt issuance cost ( 0.2 ) ( 0.3 )

Long-term debt $ 1,396.1 $ 1,383.9

Total debt $ 1,479.0 $ 1,793.2

Fiscal year maturities of long-term debt as of October 31, 2021, are as follows:

(In millions )

2025 $ 1,396.3

Thereafter $ —

Term Loan Agreement on November 2, 2021

On November 2, 2021, subsequent to the fiscal year ended October 31, 2021, the Company entered into a 364 -day, $ 840.0 million, term loan agreement by and among the Company, the lenders party thereto and The Bank of Nova Scotia, as administrative agent, which matures on November 1, 2022.

The Company used part of the funds to partially repay outstanding borrowings under the 2020 Revolver Credit Facility and for general corporate purposes.

Subsequent Events for additional information.

Term Loan Agreement on October 16, 2020

On October 16, 2020, the Company entered into a 364 -day, $ 350.0 million , term loan agreement by and among the Company, the lenders party thereto and The Bank of Nova Scotia, as administrative agent which matures on October 15, 2021.

The funds were used to partially repay outstanding borrowings under the 2020 Revolving Credit Facility (as defined below).

At October 31, 2020, the Company had $ 350.0 million outstanding under this agreement.

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Notes to Consolidated Financial Statements

Amounts outstanding under this agreement will bear interest, at the Company's option, at either the base rate, or the adjusted LIBO rate, plus, in each case, an applicable rate of 0.00 % in respect of base rate loans and 0.80 % in respect of adjusted LIBO rate loans.

The interest rate was 0.93 % at October 31, 2020.

This agreement contains customary restrictive covenants, as well as financial covenants that require the Company to maintain a certain Total Leverage Ratio and Interest Coverage Ratio consistent with the 2020 Credit Agreement discussed below.

On October 16, 2020, the Company entered into a 364 -day, $ 350.0 million, term loan agreement by and among the Company, the lenders party thereto and The Bank of Nova Scotia, as administrative agent, which matured on October 15, 2021.

At maturity, outstanding amounts under this agreement were fully repaid using borrowings under the 2020 Revolving Credit Facility.

Revolving Credit and Term Loan Agreement on April 1, 2020

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the lenders from time to time party thereto, and KeyBank National Association, as administrative agent.

The 2020 Credit Agreement provides for (a) a multicurrency revolving credit facility (the 2020 Revolving Credit Facility) in an aggregate principal amount of $ 1.29 billion and (b) a term loan facility (the 2020 Term Loan Facility) in an aggregate principal amount of $ 850.0 million , each of which, unless terminated earlier, mature on April 1, 2025.

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Notes to Consolidated Financial Statements

each of which, unless terminated earlier, mature on April 1, 2025.

In addition, the Company has the ability from time to time to request an increase to the size of the revolving credit facility or establish one or more new term loans under the term loan facility in an aggregate amount up to $ 1.605 billion, subject to the discretionary participation of the lenders.

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• Interest Coverage Ratio, as defined, to be at least 3.00 to 1.00 at all times.

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Notes to Consolidated Financial Statements

• Total Leverage Ratio, as defined, to be no higher than 3.75 to 1.00.

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The Company, after considering the potential impacts of the COVID-19 pandemic, expects to remain in compliance with its financial maintenance covenant and meet its debt service obligations for at least the twelve months following the date of issuance of these financial statements.

$ 500 million Term Loan on September 27, 2019, amended on April 1, 2020

On November 1, 2018, the Company entered into a 364 -day senior unsecured term loan agreement (the 2018 Term Loan Agreement) by and among the Company, the lenders party thereto and PNC Bank, National Association, as administrative agent which was scheduled to mature on October 31, 2019.

On September 27, 2019, the Company amended the 2018 Term Loan Agreement to establish a new 364 -day senior unsecured term loan (the 2019 Term Loan Agreement) with the same parties as the 2018 Term Loan Agreement.

The 2019 Term Loan Agreement modifies certain provisions of the 2018 Term Loan Agreement which, among other things, extended the maturity date to September 25, 2020 and increased the aggregate principal amount of the term loan facility from an original amount of $ 400 million to $ 500 million .

The Company used the additional funds to partially repay outstanding borrowings.

On April 1, 2020, the Company entered into Amendment No.

2 to the 2018 Term Loan Agreement (the Second Amendment to the 2018 Term Loan Agreement).

The Second Amendment to the 2018 Term Loan Agreement further modifies the 2018 Term Loan Agreement by, among other things, conforming certain provisions therein to those contained in the 2020 Credit Agreement discussed above.

At maturity, on September 25, 2020, outstanding amounts under the 2019 Term Loan Agreement (including the Second Amendment to the 2018 Term Loan Agreement) were fully repaid using borrowings under the 2020 Revolving Credit Facility.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following is a summary of the maximum commitments and the net amounts available to the Company under the credit facilities discussed above as of October 31, 2021:

(In millions)

Facility Limit

Outstanding Borrowings

Outstanding Letters of Credit

Total Amount Available

Maturity Date

2020 Revolving Credit Facility

April 1, 2025

2020 Term Loan Facility

April 1, 2025

2020 Term Loan

October 15, 2021

(In millions) Facility Limit Outstanding Borrowings Outstanding Letters of Credit Total Amount Available Maturity Date

2020 Revolving Credit Facility $ 1,290.0 $ 546.1 $ 1.3 $ 742.6 April 1, 2025

2020 Term Loan Facility 850.0 850.0 n/a — April 1, 2025

Total $ 2,140.0 $ 1,396.1 $ 1.3 $ 742.6

European Credit Facilities

3 unchanged sentences

Interest expense is calculated on all outstanding balances based on an applicable base rate for each country plus a fixed spread common across most subsidiaries covered under the guaranty.

At October 31, 2020 , $ 0.7 million of the facilities were utilized.

At October 31, 2021, $ 5.4 million of the facilities was utilized.

The weighted average interest rate on the outstanding balances was 0.57 %.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Asian Pacific Credit Facilities

3 unchanged sentences

Interest expense is calculated on the outstanding balance based on the base rate or TIBOR plus a fixed spread.

At October 31, 2020 , $ 57.7 million of the combined facilities were utilized.

At October 31, 2021, $ 77.7 million of the combined facilities was utilized.

The weighted average interest rate on the outstanding balances was 0.42 %.

4 unchanged sentences

Interest expense is calculated on all outstanding balances based on an applicable base rate for each country plus a fixed spread across all subsidiaries covered under each guaranty.

At October 31, 2020 , $ 0.4 million of the facilities were utilized.

At October 31, 2021, $ 0.4 million of the facilities was utilized.

The weighted average interest rate on the outstanding balances was 2.54 %.

2 unchanged sentences

The aggregate outstanding amount of letters of credit at October 31, 2021 and October 31, 2020 was $ 4.9 million and $ 4.5 million, respectively.

Recent Tax Legislation

Coronavirus Aid, Relief and Economic Security Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was enacted and signed into law in response to the market volatility and instability resulting from the COVID-19 pandemic.

It includes a significant number of tax provisions and lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (the 2017 Act).

The changes are mainly related to:

(1) the business interest expense disallowance rules for 2019 and 2020;

(2) net operating loss rules;

(3) charitable contribution limitations;

(4) employee retention credit;

and (5) the realization of corporate alternative minimum tax credits.

The Company continues to assess the impact and future implications of these provisions;

however, it does not anticipate any amounts that could give rise to a material impact to the overall Consolidated Financial Statements.

Effective Tax Rate

The Company’s effective tax rate (ETR) was 10.6 % and 2.3 % for fiscal 2020 and fiscal 2019, respectively.

The ETR in fiscal 2020 increased in comparison to fiscal 2019 primarily due to foreign earnings subject to US tax, partially offset by a shift in the geographic mix of income.

The ETR for both fiscal 2020 and fiscal 2019 was less than the US federal statutory tax rate primarily due to foreign earnings in jurisdictions with lower tax rates, a step-up of the US tax-deductible basis of intellectual property rights from intra-entity sales and excess tax benefits from share-based compensation.

This was partially offset by foreign earnings subject to US tax.

The jurisdictions with lower tax rates with the most significant tax impact include Barbados, Puerto Rico and the United Kingdom.

The ETR for fiscal 2018 was greater than the US federal statutory tax rate primarily due to enactment of the 2017 Tax Act.

This was partially offset by foreign earnings in jurisdictions with lower tax rates and

The effective tax rates for fiscal 2021 and 2020 were ( 499.1 )% and 10.6 %, respectively.

The decrease was primarily due to an intra-group transfer of intellectual property, as discussed below, and remeasurement of the related deferred tax assets caused by the UK enactment of a 25% corporate tax rate.

The effective tax rate otherwise increased due to changes in the geographical composition of pre-tax earnings, partially offset by changes in foreign earnings subject to US tax.

THE COOPER COMPANIES, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

excess tax benefits from share-based compensation.

The jurisdictions with lower tax rates with the most significant tax impact include Barbados, Puerto Rico and the United Kingdom.

The components of income before income taxes and the income tax provision related to income from all operations in our Consolidated Statements of Income consist of:

The effective tax rate for fiscal 2021 was lower than the US federal statutory tax rate primarily due to the intra-group transfer, the remeasurement of deferred tax assets, and earnings in foreign jurisdictions with lower tax rates partially offset by foreign earnings subject to US tax.

The effective tax rate for fiscal 2020 was lower than the US federal statutory rate primarily due to foreign earnings in jurisdictions with lower tax rates partially offset by foreign earnings subject to US tax.

In November 2020, the Company completed an intra-group transfer of certain intellectual property and related assets of the CooperVision business to a UK subsidiary as part of a group restructuring to establish headquarters operations in the UK.

Determining fair value involved significant judgment related to future revenue growth, operating margins and discount rates.

Income before income taxes resulting from this transfer is eliminated upon consolidation.

The transfer resulted in a step-up of the UK tax-deductible basis in the intellectual property and goodwill, creating a temporary difference between the book basis and the tax basis of these assets.

As a result, the Company recognized a deferred tax asset of $ 1,987.9 million, with a corresponding income tax benefit, during the three months ended January 31, 2021.

Components of income before income taxes:

Years Ended October 31,

2 unchanged sentences

United States $ ( 31.0 ) $ ( 88.0 ) $ ( 32.8 )

Income tax provision

The income tax provision (benefit) related to income in our Consolidated Statements of Income consists of:

Foreign 522.5 354.5 510.2

$ 491.5 $ 266.5 $ 477.4

Components of provision for income taxes:

Years Ended October 31,

(In millions)

Income tax provision

2021 2020 2019

Federal $ 21.0 $ 1.4 $ 9.2

State 1.3 1.1 1.6

Foreign 26.7 26.5 15.8

49.0 29.0 26.6

Federal ( 8.8 ) 3.2 ( 8.1 )

State ( 0.5 ) 0.8 ( 0.9 )

Foreign ( 2,492.9 ) ( 4.9 ) ( 6.9 )

( 2,502.2 ) ( 0.9 ) ( 15.9 )

Provision for income taxes $ ( 2,453.2 ) $ 28.1 $ 10.7

THE COOPER COMPANIES, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

We reconcile the provision for income taxes attributable to income from operations and the amount computed by applying the statutory federal income tax rate of 21 % for fiscal 2020 and 2019, and 23 % for fiscal 2018, to income before income taxes as follows:

Reconciliation between the expected provision for income taxes at the US federal statutory rate and the provision for income taxes:

Years Ended October 31,

(In millions)

Computed expected provision for taxes

2021 2020 2019

Provision for income taxes at United States statutory tax rate $ 103.2 $ 56.0 $ 100.3

(Decrease) increase in taxes resulting from:

Income earned outside the United States subject to different tax rates

State taxes, net of federal income tax benefit

Foreign source income subject to United States tax

Incentive stock option compensation and non-deductible employee compensation

Foreign income subject to different tax rates ( 43.6 ) ( 54.7 ) ( 85.6 )

Foreign income subject to United States tax 25.4 32.0 16.1

United States tax reform — — ( 5.8 )

Employee compensation ( 9.9 ) ( 4.4 ) ( 7.8 )

Deferred tax asset step-up 3.2 ( 9.0 ) ( 6.7 )

US provision-to-return

Tax accrual adjustment

United States provision-to-return ( 1.2 ) 7.0 4.4

Intra-group transfer to UK subsidiary ( 1,987.9 ) — —

Remeasurement of deferred tax assets from UK rate change ( 536.7 ) — —

Change in unrecognized tax benefits ( 7.6 ) ( 0.1 ) ( 1.5 )

Other, net 1.9 1.3 ( 2.7 )

Actual provision for income taxes $ ( 2,453.2 ) $ 28.1 $ 10.7

The tax effects of temporary differences that give rise to the deferred tax assets and liabilities are:

Components of deferred tax assets and liabilities:

Years Ended October 31,

2 unchanged sentences

Accounts receivable, principally due to allowances for doubtful accounts $ 3.4 $ 2.6

Litigation settlements

Inventories 6.1 5.8

Accrued liabilities, reserves and compensation accruals 78.1 77.1

Foreign deferred tax assets 2,531.5 90.9

Restricted stock and stock option expenses

Share-based compensation 28.6 21.4

Net operating loss carryforwards 18.5 9.6

19 unchanged sentences

Based upon this analysis, it is more likely than not the deferred tax assets, net of valuation allowance, will be realized.

The valuation allowance is $ 45.3 million and $ 41.5 million for fiscal 2020 and fiscal 2019, respectively.

The increase is primarily due to state net operating loss carryforwards and foreign tax credits.

The increase in valuation allowance is primarily due to foreign tax credits.

At October 31, 2021, we had federal net operating loss carryforwards of $ 63.7 million, state net operating loss carryforwards of $ 19.7 million, and $ 1.0 million of California research credit carryforwards.

Federal net operating loss carryforwards of $ 15.8 million expire on various dates between 2024 and 2037 and $ 4.5 million does not expire.

Federal net operating loss carryforwards of $ 47.5 million expire on various dates between 2025 and 2037 and $ 16.2 million do not expire.

The state net operating loss carryforwards expire on various dates between 2025 through 2043, and the California research credit carryforwards do not expire.

1 unchanged sentence

The tax benefits recognized from such positions are estimated based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

The changes in the balance of unrecognized tax benefits (UTB) were as follows:

Changes in unrecognized tax benefits:

(In millions)

Balance at October 31, 2019 $ 49.7

Decrease from prior year's UTB's

Increase from prior year's UTB's 3.4

Increase from current year's UTB's 7.6

UTB (decrease) from tax authorities' settlements

UTB (decrease) from expiration of statute of limitations ( 2.2 )

Balance at October 31, 2020 $ 58.5

Increase from prior year's UTB's

Decrease from prior year's UTB's ( 8.3 )

Increase from current year's UTB's 307.2

Increase (decrease) from settlements ( 1.9 )

UTB (decrease) from expiration of statute of limitations ( 1.7 )

2 unchanged sentences

If recognized, these tax benefits would affect our effective tax rates for 2021, 2020 and 2019, by $ 336.5 million, $ 46.0 million, and $ 41.7 million, respectively.

It is the Company's policy to recognize interest and penalties related to income tax as income tax expense.

Interest and penalties related to unrecognized tax benefits are recognized as income tax expense.

As of October 31, 2021, 2020 and 2019, we had accrued gross interest and penalties related to unrecognized tax benefits of $ 6.4 million, $ 7.3 million, and $ 3.9 million, respectively.

Included in the balance of unrecognized tax benefits at October 31, 2021 is $ 4.2 million related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months.

Filed tax returns are subject to examination by tax authorities in major tax jurisdictions after fiscal 2014.

Intellectual property rights

In November 2020, the Company completed an intra-group transfer of certain intellectual property and related operating assets and liabilities to its UK subsidiary as part of a group restructuring to establish headquarters operation in the UK.

Under US GAAP, any profit resulting from this transfer will be eliminated upon consolidation.

However, the transfer resulted in a step-up of the UK tax-deductible basis

Filed tax returns are subject to examination by tax authorities in major tax jurisdictions after fiscal 2014, including the UK and the US.

THE COOPER COMPANIES, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

in the transferred assets, including goodwill, and created a temporary difference between the book basis and the tax basis of these assets.

As a result, the Company expects to recognize a deferred tax asset of up to $ 2.4 billion , with a corresponding income tax benefit.

The valuation of the transferred assets, and the calculation of the amount of the deferred tax asset, will be finalized during the first quarter of fiscal 2021.

Earnings Per Share

5 unchanged sentences

Weighted average common shares 49.2 49.1 49.4

Effect of dilutive stock options

Effect of dilutive stock plans 0.6 0.5 0.6

Diluted weighted average common shares 49.8 49.6 50.0

4 unchanged sentences

Stock option shares excluded 107 207 198

Range of exercise prices

$226.30 - $230.09

Exercise prices $ 345.74 $ 304.54 $ 254.77

Restricted stock units excluded 2 1 8

1 unchanged sentence

Analysis of Changes in Accumulated Other Comprehensive Income (Loss):

(In millions)

Foreign Currency Translation Adjustment

Minimum Pension Liability

(In millions) Foreign Currency Translation Adjustment Derivatives Minimum Pension Liability Total

Balance at October 31, 2018 $ ( 412.2 ) $ — $ ( 18.5 ) $ ( 430.7 )

Gross change in value 9.0 — ( 33.4 ) ( 24.4 )

ASU 2018-02 adoption (1)

Tax effect — — 8.0 8.0

Balance at October 31, 2019 $ ( 403.2 ) $ — $ ( 43.9 ) $ ( 447.1 )

Gross change in value $ 0.9 $ ( 17.1 ) $ ( 16.8 ) $ ( 33.0 )

Tax effect — 4.1 4.0 8.1

Balance at October 31, 2020 $ ( 402.3 ) $ ( 13.0 ) $ ( 56.7 ) $ ( 472.0 )

Gross change in value $ 82.2 $ 34.3 $ 29.8 $ 146.3

Tax effect ( 0.2 ) ( 8.2 ) ( 7.2 ) ( 15.6 )

Balance at October 31, 2021 $ ( 320.3 ) $ 13.1 $ ( 34.1 ) $ ( 341.3 )

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Represents reclassification to retained earnings from adoption of ASU 2018-02.

Share Repurchases

1 unchanged sentence

The program has no expiration date and may be discontinued at any time.

Purchases under the 2012 Share Repurchase Program are subject to a review of the circumstances in place at the time and may be made from time to time as permitted by securities laws and other legal requirements.

Purchases under the 2012 Share Repurchase Program are subject to

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

a review of the circumstances in place at the time and may be made from time to time as permitted by securities laws and other legal requirements.

For the years ended October 31, 2021 and 2020, the Company share repurchases were as follow:

Periods Ended October 31,

Years Ended October 31, 2021 2020

Number of shares 69,622 160,850

4 unchanged sentences

$ 1.5 million or 3 cents per share on February 9, 2021 to stockholders of record on January 22, 2021;

$ 1.5 million or 3 cents on August 7, 2020 to stockholders of record on July 23, 2020;

$ 1.5 million or 3 cents per share on August 11, 2021 to stockholders of record on July 27, 2021;

$ 1.5 million or 3 cents per share on February 10, 2020 to stockholders of record on January 23, 2020;

4 unchanged sentences

The 2020 Directors' Plan provides for annual equity award grants to Non-Employee Directors on April 1 st of each fiscal year which subsequently vest on the first anniversary of the date of grant.

Grants can be awarded in the form of stock options, restricted stock, restricted stock units (RSUs), or a combination of award types.

Awards are made with a total target grant date value of $ 270,000 , or $ 283,500 in the case of the Lead Director and $ 297,000 in the case of the Chairman of the Board.

If a Non-Employee Director is appointed or elected after April 1, then they will receive a grant on the date of such appointment or election that is proportionally adjusted to reflect the number of months of actual service on the board during the first fiscal year of their election or appointment.

The 2020 Directors' Plan also allows the Board of Directors to make discretionary grants to Non-Employee Directors.

Under the 2020 Directors' Plan, awards are made in the form of RSUs unless otherwise approved by the Board of Directors.

1 unchanged sentence

Legal ownership of the shares is not transferred until the unit vests and issued RSUs have no dividend or voting rights prior to vesting.

Awards are made with a total target grant date value of $ 270,000 , or $ 283,500 in the case of the Lead Director and $ 297,000 in the case of the Chairman of the Board.

Awards may also be made in the form of stock options or restricted stock.

In the event of such awards, grants of stock options will have an exercise price equal to 100 % of fair market value on the date of grant and expire no more than 10 years after the grant date.

Awards of restricted stock provide the right to receive shares, subject to such purchase price requirements,

Awards of restricted stock provide the right to receive shares, subject to such purchase price requirements, restrictions on sale or transfer, or other conditions as approved by the Board of Directors.

Restricted shares retain dividend and voting rights.

As of October 31, 2021, 37,853 shares remain available under the 2020 Directors' Plan for future grants.

THE COOPER COMPANIES, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

restrictions on sale or transfer, or other conditions as approved by the Board of Directors.

Restricted shares retain dividend and voting rights.

As of October 31, 2020, 42,929 shares remain available under the 2020 Directors' Plan for future grants.

2007 Long-Term Incentive Plan (2007 Plan)

2 unchanged sentences

The Third Amended and Restated 2007 Plan is designed to increase our stockholder value by attracting, retaining and motivating key employees and consultants who directly influence our profitability.

The Third Amended and Restated 2007 Plan authorizes either our Board of Directors, or a designated committee thereof composed of two or more Non-Employee Directors, to grant to eligible individuals during the period ending December 31, 2026, up to 6,930,000 shares in the form of specified equity awards including stock option, restricted stock unit and performance share awards, subject to adjustment for future stock splits, stock dividends, expirations, forfeitures and similar events.

During fiscal 2020, we granted stock options and restricted stock units (RSUs) to employees under the Third Amended and Restated 2007 Plan.

Prior to fiscal 2020 we also granted performance share awards to employees.

The Third Amended and Restated 2007 Plan authorizes either our Board of Directors, or a designated committee thereof composed of two or more Non-Employee Directors, to grant to eligible individuals during the period ending December 31, 2026, up to 6,930,000 shares in the form of specified equity awards including stock options, restricted stock units and performance share awards, subject to adjustment for future stock splits, stock dividends, expirations, forfeitures and similar events.

During fiscal 2021, we granted stock options, restricted stock units, and performance share awards to employees under the Third Amended and Restated 2007 Plan.

All stock options are granted at 100 % of fair market value on the date of grant and expire no more than 10 years after the grant date.

6 unchanged sentences

Share-Based Compensation

Compensation expense and the related tax benefit recognized in our consolidated financial statements for share-based awards, including the Employee Stock Purchase Plan, were as follows:

Compensation expense and the related tax benefit recognized in our Consolidated Statements of Income for share-based awards, including the Employee Stock Purchase Plan, were as follows:

(In millions) 2021 2020 2019

15 unchanged sentences

Years Ended October 31, 2021 2020 2019

Expected life

Expected life 4.0 years 4.4 years 4.4 years

Expected volatility 30.3 % 24.5 % 22.0 %

2 unchanged sentences

The activity and status of our stock option plans are summarized below:

Shares Weighted-

Exercise Price

Per Share Weighted-

(in years) Aggregate

Intrinsic Value

Outstanding at October 31, 2020 1,103,507 $ 213.53

Granted 109,440 $ 345.74

Exercised ( 235,478 ) $ 142.31

Forfeited or expired ( 4,777 ) $ 327.62

5 unchanged sentences

The total intrinsic value of options exercised during the fiscal year ended October 31, 2021 was $ 64.7 million.

The weighted-average fair value of each option granted during fiscal 2019, estimated as of the grant date using the Black-Scholes option pricing model, for the 2007 Plan was $ 60.71 .

Stock awards outstanding under our current plans have been granted at prices which are either equal to or above the market value of the common stock on the date of grant.

The weighted-average fair value of each option granted during fiscal 2020 and 2019, estimated as of the grant date using the Black-Scholes option pricing model, for the 2007 Plan was $ 70.45 and $ 60.71 , respectively.

The total intrinsic value of options exercised during fiscal 2020 and 2019 was $ 22.6 million and $ 40.1 million, respectively.

Stock options outstanding under our current plans have been granted at prices which are either equal to or above the market value of the common stock on the date of grant.

Options granted under the 2007 Plan generally vest over a range of three to five years based on service conditions and expire no later than ten years after the grant date.

Options granted under the 2020 Directors Plan generally vested in one year and expire no later than ten years after the grant date.

Options granted under the 2020 Directors' Plan generally vest in one year and expire no later than ten years after the grant date.

We generally recognize compensation expense ratably over the vesting period.

However, Directors' options grants would have been expensed on the date of grant as the 2020 Directors' Plan did not contain a substantive future requisite service period.

As of October 31, 2020, there was $ 20.9 million of total unrecognized compensation cost related to nonvested options, which is expected to be recognized over a remaining weighted-average vesting period of 3.4 years.

As of October 31, 2021, there was

THE COOPER COMPANIES, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

$ 21.0 million of total unrecognized compensation cost related to nonvested options, which is expected to be recognized over a remaining weighted-average vesting period of 2.7 years.

Restricted Stock Units

5 unchanged sentences

The status of our non-vested RSUs is summarized below:

Shares Weighted-

Grant Date Fair

1 unchanged sentence

Non-vested RSUs at October 31, 2020 368,620 $ 247.09

Granted 114,111 $ 352.92

Vested and issued ( 137,119 ) $ 222.42

4 unchanged sentences

Performance units, if earned, may be paid in cash or shares of common stock.

We granted performance unit awards on December 8, 2020 under the 2007 Plan.

The performance shares actually earned will range from zero to 200 % of the target number of performance shares for performance periods ending in fiscal 2021 through fiscal 2024.

3 unchanged sentences

We recognize compensation expense ratably over the vesting period.

As of October 31, 2020 , there was no unrecognized compensation cost related to non-vested performance units.

As of October 31, 2021, there was $ 10.2 million of total unrecognized compensation cost related to non-vested performance units, which is expected to be recognized over a remaining weighted-average vesting period of 2.3 years.

Employee Stock Purchase Plan

5 unchanged sentences

These shares will be made available from shares of common stock reacquired by the Company as Treasury Stock.

During fiscal year ended October 31, 2020, we issued 11,641 shares to our employees under the ESPP.

During fiscal 2021 and 2020, we issued 17,575 and 11,641 shares to our employees under the ESPP, respectively.

At October 31, 2021, the number of shares remaining available for future issuance under the ESPP was 970,784 shares.

Total ESPP share-based compensation recognized during the fiscal year ended October 31, 2020 was $ 0.7 million .

Total ESPP share-based compensation recognized during fiscal 2021 and 2020 was $ 1.0 million and $ 0.7 million, respectively.

THE COOPER COMPANIES, INC.

13 unchanged sentences

(In millions)

2021 2020 2019

Change in benefit obligation

Benefit obligation, beginning of year $ 218.8 $ 189.7 $ 147.1

Service cost 17.2 13.9 10.1

Interest cost 4.4 5.2 6.1

Benefits paid ( 11.5 ) ( 10.0 ) ( 10.2 )

Actuarial loss (gain)

Actuarial loss 2.0 20.0 36.6

Benefit obligation, end of year $ 230.9 $ 218.8 $ 189.7

8 unchanged sentences

(In millions)

Amounts recognized in the statement of financial position consist of:

2021 2020 2019

Amounts recognized in the Consolidated Balance Sheets consist of:

Noncurrent liabilities $ ( 31.4 ) $ ( 59.3 ) $ ( 53.7 )

Net amount recognized at year end $ ( 31.4 ) $ ( 59.3 ) $ ( 53.7 )

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended October 31,

(In millions)

2021 2020 2019

Amounts recognized in accumulated other comprehensive income consist of:

Net loss $ 44.4 $ 74.2 $ 57.3

Accumulated other comprehensive income $ 44.4 $ 74.2 $ 57.3

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended October 31,

(In millions)

Information for pension plans with projected benefit obligation in excess of plan assets:

2021 2020 2019

Information for defined benefit plans with projected benefit obligation in excess of plan assets:

Projected benefit obligation $ 230.9 $ 218.8 $ 189.7

2 unchanged sentences

(In millions)

Information for pension plans with accumulated benefit obligations in excess of plan assets:

2021 2020 2019

Information for defined benefit plans with accumulated benefit obligations in excess of plan assets:

Accumulated benefit obligation $ 207.6 $ 195.8 $ 170.8

2 unchanged sentences

(In millions)

2021 2020 2019

Reconciliation of (prepaid) accrued pension cost:

Accrued pension cost at prior fiscal year end

(Prepaid)/Accrued pension cost at prior fiscal year end $ ( 14.8 ) $ ( 3.7 ) $ 2.2

Net periodic benefit cost 14.5 12.3 7.2

Contributions made during the year ( 12.7 ) ( 23.4 ) ( 13.1 )

Accrued pension cost at fiscal year end

(Prepaid)/Accrued pension cost at fiscal year end $ ( 13.0 ) $ ( 14.8 ) $ ( 3.7 )

Years Ended October 31,

(In millions)

Components of net periodic benefit cost and other amounts recognized in (other comprehensive income) the fiscal year:

2021 2020 2019

Components of net periodic benefit cost and other amounts recognized in the Consolidated Statements of Income:

Net periodic benefit cost:

Service cost $ 17.2 $ 13.9 $ 10.1

Interest cost 4.4 5.2 6.1

2 unchanged sentences

Net periodic pension cost $ 14.5 $ 12.3 $ 7.2

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended October 31,

(In millions)

2021 2020 2019

Other changes in plan assets and benefit obligations recognized in other comprehensive income:

Net loss (gain)

Net (gain) loss $ ( 24.4 ) $ 20.8 $ 34.2

Amortizations of net gain ( 5.4 ) ( 4.0 ) ( 0.8 )

Total recognized in other comprehensive income

Total recognized in net periodic benefit cost and other comprehensive income

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Total recognized in other comprehensive (income) loss $ ( 29.8 ) $ 16.8 $ 33.4

Total recognized in net periodic benefit cost and other comprehensive (income) loss $ ( 15.2 ) $ 29.0 $ 40.6

Years Ended October 31, 2021 2020 2019

2 unchanged sentences

Projected Benefit Obligation 2.78 % 3.13 % 4.42 %

Service Cost 2.86 % 3.18 % 4.49 %

Interest Cost 2.07 % 2.78 % 4.22 %

15 unchanged sentences

This loss is primarily due to losses from assumption changes of approximately $ 0.7 million, and losses of approximately $ 1.3 million due to demographic experience.

The key assumption changes were the decrease in the discount rate (loss of $ 11.0 million ), changes in assumptions for lump sum determination (loss of $ 8.4 million ), and a change to the mortality table (gain of $ 1.3 million ).

The primary reasons for demographic losses were salary increases higher than expected, an increase in the number of participants, and the net impact of other demographic changes.

The key assumption changes were the decrease in the discount rate (loss of $ 0.7 million), a change in the mortality tables projection scale (loss of $ 0.5 million), and changes in assumptions for lump sum determination (gain of $ 0.5 million).

The primary reasons for demographic losses were the net effect of retirement rates, termination rates, salary increases and other experience that was different from assumed.

THE COOPER COMPANIES, INC.

5 unchanged sentences

Cash and cash equivalents 5.0 % 11.8 % 3.2 %

Corporate common stock

Equity mutual funds 62.8 % 57.7 % 63.7 %

Hedging Strategy Funds 4.7 % 4.3 % 4.9 %

Real estate funds

Bond mutual funds 27.5 % 26.2 % 28.2 %

Total 100.0 % 100.0 % 100.0 %

The Plan invests in a diversified portfolio of assets intended to minimize risk of poor returns while maximizing expected portfolio returns.

3 unchanged sentences

As of the measurement date of October 31, 2021, the fair value measurement of plan assets is as follows:

(In millions)

Quoted Prices

(In millions) Total Quoted Prices

Identical Assets

(Level 1) Significant

(Level 2) Significant

Asset category

3 unchanged sentences

Bond mutual funds 54.8 24.5 30.2 0.1

Total $ 199.5 $ 169.2 $ 30.2 $ 0.1

The Plan has an established process for determining the fair value of plan assets.

11 unchanged sentences

The Company closely monitors the funded status of the Plan with respect to legislative and accounting rules.

The Company expects to make contributions of approximately $ 10.0 million during fiscal 2021.

The Company does not expect to make a contribution to the Plan during fiscal 2022.

Estimated Future Benefit Payments

(In millions)

2027-2031 $ 79.6

Plan Soft Freeze

2 unchanged sentences

Existing employees already covered by the Plan, continue to accrue their benefits.

There was no material impact on the Company's results of operations, financial position and cash flows for fiscal 2020 or fiscal 2019.

Cooper's 401(k) Savings Plan

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Cooper's contributions on account of participating employees, were $ 7.2 million, $ 6.8 million and $ 6.5 million for the years ended October 31, 2021, 2020 and 2019, respectively.

International Pension Plans

International Defined Benefit Plans

For its employees outside the United States, the Company also participates in country-specific defined contribution plans and government-sponsored retirement plans.

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The carrying value of the Company's revolving credit facility and term loans approximates fair value based on current market rates (Level 2).

On April 6, 2020 the Company entered into six interest rate swap contracts which are used to hedge its exposure to changes in cash flows associated with its variable rate term loans and are designated as derivatives in a cash flow hedge.

On April 6, 2020 the Company entered into six interest rate swap contracts which are used to hedge its exposure to changes in cash flows associated with its variable rate debt and are designated as derivatives in a cash flow hedge.

The payment streams are based on a total notional amount of $ 1.5 billion at the inception of the contracts.

The interest rate swap contracts have maturities of seven years or less.

On October 1, 2020, one of the six interest rate swap contracts matured.

The outstanding contracts as of October 31, 2020 have a total notional amount of $ 1.4 billion .

The interest rate swap contracts had maturities of seven years or less.

As of October 31, 2021, three of the six interest rate swap contracts have matured and the outstanding contracts have a total notional amount of $ 1.0 billion.

The gain or loss on the derivatives is recorded as a component of accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

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The Company did not have any cross-currency swaps or foreign currency forward contracts as of October 31, 2021.

The fair value of the Company's contingent consideration for which a liability is recorded is measured on a recurring basis as a Level 3 measurement , and the change in fair value is recognized in selling, general and administrative expense in the Consolidated Statements of Income.

Refer to Note 3.

Acquisitions and Assets Held for Sale for further information.

Nonrecurring fair value measurements

The Company uses fair value measures when determining assets and liabilities acquired in an acquisition as described in Note 3.

Acquisitions which are considered a Level 3 measurement.

Acquisitions and Assets Held for Sale, which are considered a Level 3 measurement.

Contingencies

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The Company does not believe that the ultimate resolution of these proceedings or claims pending against it could have a material adverse effect on its financial condition or results of operations.

At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies .

At each reporting period, the Company

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies .

Legal fees are expensed as incurred.

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The Company's two operating segments are described below.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

• CooperVision.

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Interest expense, and other income and expenses are not allocated to individual segments.

No customers accounted for 10% or more of our consolidated net revenue in the fiscal 2020, 2019 and 2018.

No customer accounted for 10% or more of our consolidated net revenue in the fiscal 2021, 2020 and 2019.

Identifiable assets are those used in continuing operations except cash and cash equivalents, which we include as corporate assets.

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CooperVision net sales by category:

Toric lens $ 697.5 $ 598.2 $ 620.0

Multifocal lens 238.6 197.0 202.9

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Office and surgical products 451.3 358.8 422.4

Fertility 319.2 229.1 258.1

Total CooperSurgical net sales 770.5 587.9 680.5

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Information by business segment for each of the years in the three-year period ended October 31, 2021, follows:

(In millions)

CooperSurgical

(In millions) CooperVision CooperSurgical Corporate Consolidated

Net sales $ 2,152.0 $ 770.5 $ — $ 2,922.5

Operating income (loss) $ 481.3 $ 71.8 $ ( 47.3 ) $ 505.8

Interest expense 23.1

Other expense, net

Other (income), net ( 8.8 )

Income before income taxes $ 491.5

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Capital expenditures $ 190.0 $ 24.4 $ — $ 214.4

Net sales $ 1,843.0 $ 587.9 $ — $ 2,430.9

Operating income (loss) $ 375.7 $ ( 14.7 ) $ ( 49.2 ) $ 311.8

Interest expense 36.8

Other (income), net

Other expense, net 8.5

Income before income taxes $ 266.5

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Capital expenditures $ 260.3 $ 50.1 $ — $ 310.4

Net sales $ 1,972.9 $ 680.5 $ — $ 2,653.4

Operating income (loss) $ 506.4 $ 87.9 $ ( 47.6 ) $ 546.7

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Information by geographical area by country of domicile for each of the years in the three-year period ended October 31, 2021, follows:

(In millions)

(In millions) United

States Europe Rest of

& Corporate Consolidated

Net sales to unaffiliated customers $ 1,339.2 $ 957.9 $ 625.4 $ 2,922.5

Sales between geographic areas 494.9 815.1 ( 1,310.0 ) —

Operating income (loss)

Net sales $ 1,834.1 $ 1,773.0 $ ( 684.6 ) $ 2,922.5

Operating (loss) income $ ( 26.8 ) $ 416.2 $ 116.4 $ 505.8

Long-lived assets $ 737.5 $ 377.2 $ 232.9 $ 1,347.6

Sales to unaffiliated customers

Net sales to unaffiliated customers $ 1,103.6 $ 789.8 $ 537.5 $ 2,430.9

Sales between geographic areas 391.7 327.1 ( 718.8 ) —

Operating income (loss)

Net sales $ 1,495.3 $ 1,116.9 $ ( 181.3 ) $ 2,430.9

Operating (loss) income $ ( 14.5 ) $ 21.9 $ 304.4 $ 311.8

Long-lived assets $ 721.3 $ 363.0 $ 197.6 $ 1,281.9

Sales to unaffiliated customers

Net sales to unaffiliated customers $ 1,211.8 $ 854.8 $ 586.8 $ 2,653.4

Sales between geographic areas 650.7 300.8 ( 951.5 ) —

Net sales $ 1,862.5 $ 1,155.6 $ ( 364.7 ) $ 2,653.4

Operating income $ 83.2 $ 29.3 $ 434.2 $ 546.7

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Financial Derivatives and Hedging

As part of the Company’s overall risk management practices the Company enters into financial derivatives, interest rate swaps designated as cash flow hedges, to hedge the floating interest rate on its debt.

As part of the Company’s overall risk management practices the Company enters into financial derivatives, interest rate swaps designated as cash flow hedges, to hedge the Company's exposure to changes in cash flows associated with its variable rate debt.

The Company records all derivatives on its Consolidated Balance Sheets at fair value.

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The effectiveness of cash flow hedges is assessed at inception and quarterly thereafter.

The Company does not offset fair value amounts recognized for derivative instruments in its consolidated balance sheet for presentation purposes.

The Company does not offset fair value amounts recognized for derivative instruments in its Consolidated Balance Sheets for presentation purposes.

Credit risk related to derivative transactions reflects the risk that a party to the transaction could fail to meet its obligation under the derivative contracts.

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As of October 31, 2021, the Company had the following outstanding derivatives designated as hedging instruments:

(In millions, except for number of instruments)

Number of Instruments

Notional Value

(In millions, except for number of instruments) Number of Instruments Notional Value

Interest Rate Swap Contracts 3 $ 1,000

These contracts have maturities of seven years or less.

These contracts have remaining maturities of six years or less.

The pre-tax impact of gain on derivatives designated for hedge accounting recognized in other comprehensive income (loss) was $ 17.2 million ($ 13.1 million, net of tax) as of October 31, 2021.

The pre-tax impact of loss on derivatives designated for hedge accounting recognized in other comprehensive income (loss) was $ 17.1 million ($ 13.0 million, net of tax) as of October 31, 2020.

The Company did not have any derivatives designated as hedging instruments for the period ended October 31, 2019.

THE COOPER COMPANIES, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table summarizes the fair values of derivative instruments as of the periods indicated and the line items in the accompanying Consolidated Balance Sheets where the instruments are recorded:

Derivative Assets

(In millions) October 31, 2021 October 31, 2020

Derivatives designated as cash flow hedges Balance sheet location

Interest rate swap contracts Other current assets $ — $ —

Interest rate swap contracts Other non-current assets 17.2 —

Derivative Liabilities

(In millions)

October 31, 2020

Derivatives designated as cash flow hedges

Balance sheet location

Interest rate swap contracts

Other current liabilities

Interest rate swap contracts

Other non-current liabilities

(In millions) October 31, 2021 October 31, 2020

Derivatives designated as cash flow hedges Balance sheet location

Interest rate swap contracts Other current liabilities $ — $ 0.6

Interest rate swap contracts Other non-current liabilities — 16.5

The following table summarizes the amounts recognized with respect to our derivative instruments within the accompanying Consolidated Statements of Income:

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(In millions) 2021 2020 2019

Derivatives designated as cash flow hedges

Location of Loss Recognized on Derivatives

Interest rate swap contracts

Interest expense

Derivatives designated as cash flow hedges Location of Loss Recognized on Derivatives

Interest rate swap contracts Interest expense $ 8.0 $ 3.7 $ —

The Company expects that $ 5.1 million recorded as a component of accumulated other comprehensive income (loss) will be realized in the Consolidated Statements of Income over the next twelve months and the amount will vary depending on prevailing interest rates.

The following table details the changes in accumulated other comprehensive income:

(In millions) Amount

Balance as of October 31, 2019 $ —

Amount recognized in other comprehensive income on interest rate swap contracts, gross ($( 15.8 ), net of tax)

Amount reclassified from other comprehensive income into earnings, gross ($ 2.8 , net of tax)

Balance loss as of October 31, 2020 $ ( 17.1 )

Amount recognized in other comprehensive income on interest rate swap contracts, gross ($ 20.0 , net of tax)

Amount reclassified from other comprehensive income into earnings, gross ($ 6.1 , net of tax)

Balance gain as of October 31, 2021 $ 17.2

Subsequent Events

Term Loan Agreement on November 2, 2021

THE COOPER COMPANIES, INC.

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Notes to Consolidated Financial Statements

The Company expects that $ 6.8 million recorded as a component of accumulated other comprehensive income (loss) will be realized in the statements of earnings over the next twelve months and the amount will vary depending on prevailing interest rates.

The following table details the changes in accumulated other comprehensive income:

(In millions)

Beginning balance gain / (loss) as of October 31, 2019

Amount recognized in other comprehensive income on interest rate swap contracts (net of tax of $5.0 million)

Amount reclassified from other comprehensive income into earnings, gross (net of tax of $0.9 million)

Ending balance loss as of October 31, 2020

Selected Quarterly Financial Data (Unaudited)

(In millions, except for earnings per share)

Income before income taxes

Net income attributable to Cooper stockholders

Earnings per share attributable to Cooper stockholders - basic

Earnings per share attributable to Cooper stockholders - diluted

Income before income taxes

Net income attributable to Cooper stockholders

Earnings per share attributable to Cooper stockholders - basic

Earnings per share attributable to Cooper stockholders - diluted

of Nova Scotia, as administrative agent (the 2021 Term Loan Agreement), which matures on November 1, 2022.

The Company used part of the funds to partially repay outstanding borrowings under the 2020 Revolving Credit Facility and for general corporate purposes.

Amounts outstanding under the 2021 Term Loan Agreement will bear interest, at the Company’s option, at either the alternate base rate, or the adjusted LIBO rate (each as defined in the 2021 Term Loan Agreement), plus, in the case of adjusted LIBO rate loans, an applicable rate of 60 basis points.

The 2021 Term Loan Agreement contains customary restrictive covenants, as well as financial covenants that require the Company to maintain a certain total leverage ratio and interest coverage ratio, each as defined in the 2021 Term Loan Agreement, consistent with the 2020 Credit Agreement.

Debt for additional information.

Generate Life Sciences Acquisition

The aggregate consideration is $ 1.605 billion in cash, subject to adjustment as set forth in the Merger Agreement.

The transaction is anticipated to close in the first quarter of fiscal 2022 and is subject to customary closing conditions, including regulatory approval.

This acquisition is a strong strategic fit for CooperSurgical as it allows the Company to better serve fertility clinics and Obstetricians/Gynecologists (OB/GYN) with a more extensive suite of products and services.

THE COOPER COMPANIES, INC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data